MarketWatch Quotes Leila Carney on Moore v. United States


The Supreme Court upheld a federal tax that made a Washington couple pay for their investment gains despite never reaping profits, concluding that their stake in a foreign company had already been turned into taxable income.

Though supporters and opponents wanted the nation’s top court to use the widely-watched case as a chance to wade into the legality of wealth taxes, the majority refused to enter the fray.

. . .

The decision on the Moore v. United States may not have dug into wealth taxes, but the fact that the court even agreed to hear the case should be a warning sign that it’s ready to step in next time, said Leila Carney, a Member at the law firm Caplin & Drysdale.

“If I were in Congress, I would say ‘OK, I’ve been told how far I can go. I’m going to push the limit on this, but I know what’s going to be a bridge too far,’” Carney said.

The ruling is also a warning shot to entrepreneurs about Congressional power to tax their foreign investments, she noted.

. . .

The Supreme Court majority may have avoided getting too deep on wealth-tax hypotheticals, but the real-world chance of lost tax revenue weighed heavy, Carney said.

“In this case, it was probably true there was a serious risk to huge swaths of the tax code. I think the court really bought into that and took it seriously and realized it bit off more than it could chew in this case,” Carney said.

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